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Bank changing name and charterIt's not often...


Bank changing name and charter

It's not often that a bank changes from a federal to a state charter.

But when Frederick County National Bank was in the process of changing its name to FCNB Bank, it investigated a charter change, too. President A. Patrick Linton found that by switching to a state charter, the bank could save $60,000 a year in examination assessments. And that doesn't include the lower cost of approvals for corporate changes such as establishing a subsidiary, or opening and closing branches.

No longer will FCNB be regulated by the Office of the Comptroller of the Currency. Now it will be regulated by the Federal Reserve Board, which also oversees the parent company, FCNB Corp. The state coordinates its examinations with the Fed.

"We've expanded our trade area and look to do that more, and we think FCNB Bank makes more sense," Mr. Linton said of the name change. "It's shorter, it's easier to say and it's less cumbersome than Frederick County National Bank."

Both changes are expected to take effect early next month, 175 years after the company received its bank charter in 1818.

MNC's Woltzen leaving job as vice president

That familiar phrase, "pursuing outside interests" has cropped up again. This week it refers to Hugh A. Woltzen, who until recently headed MNC Financial Inc.'s wholesale banking division, which included most large and specialty business customers.

Mr. Woltzen, 47, said in a statement yesterday that he will leave his job as executive vice president later this month. "I . . . am proud to have been a part of this company during its dramatic turnaround over the past two years."

President and CEO Frank Bramble praised Mr. Woltzen's "efforts related to the ongoing growth and management of credit quality in our commercial loan portfolios during the recent period marked by a very difficult economic environment."

Mr. Woltzen's star appeared to have faded in February when it was announced that Susan C. Keating, who headed retail banking operations, would take charge of the newly combined retail and wholesale division. He was named head of strategic planning.

A 23-year veteran of MNC, Mr. Woltzen also has run the company's commercial finance subsidiary, with offices in Pittsburgh, Chicago, Houston and Dallas.

He is among a half dozen or so upper level managers who have left in the last several months, in advance of the proposed merger with NationsBank Corp.

Venture capitalists tougher on pricing

Venture capitalists probably know this, but here's some news for entrepreneurs looking for venture investments: The purse strings are getting tighter.

Fresh commitments to venture capital funds last year exceeded those of the prior year for the first time since 1987. But the valuations that venture investors give to companies has been falling, according to a new study from Coopers & Lybrand.

Venture capitalists define success in financing when the value of a company before injecting a new round of money exceeds the value after the previous investment. The study covered some 80 companies that received money from 1990 to 1992, and found that 44 percent had a "pre-money valuation" lower than the previous round's "post-money valuation," according to the study. That was up from 25 percent in a 1987-1989 study.

"These trends clearly indicate venture capitalists were tougher on pricing during 1990 to 1992," said Alan L. Earhart, chairman of Coopers & Lybrand's national venture capital group.

Senate panel weighs bill to halt loan scams

A key congressional committee yesterday heard testimony on a bill designed to halt home loan scams in poor neighborhoods.

Lawrence B. Lindsey, a member of the Federal Reserve Board, (( told the Senate Banking Committee the bill is a commendable effort to stop "reverse redlining," in which lenders charge excessive interest rates and loan origination fees in targeted areas. All too often, he said, the poor lose their homes. But, he added, legislation that is too broad could choke off credit to low-income borrowers.

A spokeswoman for Consumers Union and several other consumer groups recommended a broader bill that would impose penalties on any lender that approves a loan when it is clear a homeowner won't be able to repay. She said the legislation also should apply to lines of credit secured by home-equity loans, not just closed-end second mortgages.

In reverse redlining, a lender offers home-improvement loans to residents of low-income communities with considerable equity in their homes. The true costs of the loan are concealed by collecting loan origination fees directly from loan proceeds, by including balloon payments to make monthly payments appear more affordable, or by other methods.

The bill would require additional disclosures to borrowers when they take out such high-cost mortgage loans. It would give the borrower three days to cancel the loan before settlement.

The bill targets loans that have one or more of several features, including:

* An annual rate more than 10 percentage points above federal securities of comparable maturity.

* The consumer's monthly debt, including the loan, exceeds 60 percent of income.

* Points and other fees paid before closing exceed 8 percent of the loan.

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